US dollar continues to fall, crude oil plunges over 6%, metals show mixed performance, SHFE gold, SHFE silver, and coking coal fall over 1% [Overnight Market]

SMM June 25 News:

Metal Market:

Overnight, domestic and overseas metal markets showed mixed performance. Domestically, SHFE lead led the gains with a 0.92% increase, while LME aluminum fell 0.79%, LME tin dropped 0.71%, and LME nickel rose 0.68%. The % changes of other metals were relatively small. The main alumina futures contract fell 0.21%, and the main aluminum casting futures contract dropped 0.36%.

Ferrous metals series generally declined, with stainless steel being the only exception, rising 0.69%. Other metals in this category fell, with rebar dropping 0.6%, and iron ore and HRC both falling 0.64%. In the coking coal and coke sector, coking coal fell 1.57%, and coke dropped 0.77%.

In precious metals, COMEX gold rose 0.07%, and COMEX silver increased 0.44%. Domestically, SHFE gold fell 1.25%, and SHFE silver dropped 1.06%.

As of the overnight market close at 6:46 a.m. on June 25

》Click to view SMM Futures Data Dashboard

Macro Front

Domestic Aspect:

[Six Departments: Strengthen the Coordination of Investment and Financing Functions in the Capital Market, Promote the Entry of Medium and Long-Term Funds into the Market, and Foster Capital Market Stability] The People's Bank of China and five other departments jointly issued the "Guidance on Financial Support for Boosting and Expanding Consumption." The guidance emphasizes the need to solidify the macroeconomic and financial foundation, support residents' employment and income growth, optimize insurance coverage, and actively cultivate consumer demand. It also highlights the importance of strengthening incentives from structural monetary policy tools, increasing credit support for key areas of service consumption, and developing diversified financing channels such as bonds and equities. The guidance stresses the need to focus on key consumption areas, increase financial support, innovate financial products tailored to consumption scenarios and characteristics, and continuously improve the quality and efficiency of financial services in the consumption sector. It also calls for optimizing consumer payment services, strengthening the credit system in the consumption sector, and enhancing the protection of financial consumer rights and interests. Additionally, it mentions the need to solidify the macroeconomic foundation, stabilize consumption expectations, increase support for the real economy, strengthen the coordination and linkage between financial, fiscal, and industrial policies, implement monetary policies effectively, strengthen countercyclical and cross-cyclical adjustments, and use a variety of monetary policy tools such as reserve requirements, re-lending and rediscounting, and open market operations to maintain ample liquidity and continuously drive down the overall social financing costs. It also emphasizes the need to implement fiscal policies effectively, better leverage the positive role of consumption in smoothing the national economic cycle and driving economic growth, strengthen the coordination of investment and financing functions in the capital market, promote the entry of medium and long-term funds into the market, and foster the stable development of the capital market. 》Click to view details

US Dollar Aspect:

Overnight, the US dollar index fell 0.43% to 97.97. During his testimony before the US Congress, Powell stated that he and many officials expected inflation to begin rising soon, and the US Fed was not in a hurry to reduce borrowing costs during this period. But the US dollar still declined.

Two US Fed policymakers previously expressed support for recent interest rate cuts, citing concerns about the labor market and diminished expectations of rising inflation. US Fed Vice Chair for Supervision Bowman stated on Monday that the timing for an interest rate cut appears imminent. US Fed Governor Waller said last Friday that the central bank should consider cutting interest rates at its next meeting. Trump remarked on Tuesday that US interest rates should be lowered by at least two to three percentage points.

Federal funds futures traders now anticipate 60 basis points of rate cuts this year, compared to around 46 basis points before Waller's comments last Friday. This suggests markets are convinced the US Fed will definitely cut rates twice more by 25 basis points each, with growing likelihood of a third cut. The probability of a rate cut at the July 29-30 meeting remains low, with the first reduction expected in September. Data released Tuesday showed US consumer confidence unexpectedly deteriorated in June as households grew concerned about business conditions and employment prospects over the next six months. (Wenhua Composite)

Other currencies:

The euro and yen strengthened as oil prices plunged. The EU and Japan heavily rely on oil and liquefied natural gas imports, while the US is a net exporter. The euro rose 0.38% against the US dollar to $1.162 in New York late trading, after earlier touching $1.1641. The US dollar fell 1% against the yen to ¥144.68.

Risk-sensitive assets like the Australian dollar also gained amid improved risk sentiment. The Aussie rose 0.68% to $0.6503. Sterling climbed 0.77% to $1.3626, earlier reaching $1.3648 - its highest level since January 2022.

Macro highlights:

Today's data releases include the US May building permits annualized revised total, US May seasonally adjusted new home sales annualized total, New Zealand May trade balance, Switzerland June Credit Suisse/CFA economic expectations index, Australia ANZ consumer confidence index for the week ending June 22, and Australia May Bureau of Statistics CPI year-over-year (seasonally adjusted).

Additionally, FOMC permanent voter and New York Fed President Williams will speak, Fed Chairman Powell testifies before the Senate committee on the semiannual monetary policy report, NATO heads of state and government hold a summit in The Hague from June 24-25 with Trump confirmed to attend, and the Bank of Japan releases June monetary policy meeting summary of opinions.

Crude oil:

Oil prices extended declines overnight, with WTI crude falling 5.11% and Brent crude dropping 5.22% to two-week lows as supply risks eased, with markets anticipating geopolitical de-escalation may reduce risks of Middle East oil supply disruptions. Tamas Varga, a senior analyst at PVM Oil Associates, a brokerage and consulting firm under TP ICAP, said, "The risk premium that emerged after Israel's initial attack on Iran nearly two weeks ago has completely dissipated."

Regarding other supply news, KazMunayGaz, the national energy company of Kazakhstan, has revised upward its 2025 oil production forecast for the Tengiz oilfield, the country's largest and led by Chevron, from 34.8 million mt to 35.7 million mt. Kazakhstan, a member of OPEC, is among several other member countries of the organization that are also increasing production. Guyana's oil production rose to 667,000 barrels per day (bpd) in May from 611,000 bpd in April, driven by increased output from two of the three production facilities operated by US oil major Exxon Mobil.

Data released by the American Petroleum Institute (API) showed that US crude oil inventories fell by 4.23 million barrels, distillate inventories dropped by 1.03 million barrels, and gasoline inventories rose by 764,000 barrels in the week ending June 20. The US Energy Information Administration (EIA) is set to release its weekly crude oil inventory report on Wednesday. Analysts surveyed, on average, expect US crude oil inventories to have fallen by about 800,000 barrels, distillate inventories to have risen by about 400,000 barrels, and gasoline inventories to have increased by 400,000 barrels in the week ending June 20. (Wenhua Comprehensive)